Views from the insurance industry

The Fisher Family’s Story

Anther blog post by our intern Ben Whitney:Every so often, an article comes up on Insurance Journal pertinent to topics I’ve written about before. I was fortunate enough to stumble upon a big-time article about Progressive Insurance and their response to a claim regarding the death of a policy-holder and an at-fault under-insured motorist.

In June of 2010, Kaitlynn Fisher, the sister of NY-based comedian Matt Fisher, was killed when her car was hit by an under-insured motorist with Nationwide. As of two weeks ago, the claim had yet to be settled. As his frustration with Progressive boiled over, Matt took to Twitter and Tumblr to share his sister’s story. Her story drew national attention in a viral manner, as Matt’s Tumblr post was shared nearly 12,000 times in a matter of days.

Kaitlynn was killed as she passed through an intersection on a green light and was struck by an under-insured motorist that had run a red light. The motorist was insured for $20,000 in personal liability coverage. When a driver is found to be at fault, the insurer is responsible for paying the victim up to the limits of the coverage. Nationwide settled with the Fisher family almost immediately, granting them the $20,000 owed under their insured’s policy. In Matt Fisher’s eyes, this remittance was seen as an admission of fault, something Progressive may not have interpreted the same way.

Kaitlynn Fisher was insured for $100,000 in under-insured motorist protection. With Nationwide paying out $20,000, this leaves Progressive on the hook for $80,000. Law states that Progressive is only required to pay out Kaitlynn’s policy if the driver is proven to be at fault. Progressive refused to pay $80,000 to the Fisher family, and the law forbid them from taking Progressive to court, thus the Fisher family was forced to prove the other driver’s negligence in court. This is where things start to get a little shady, in Matt’s eyes.

Matt argues in another Tumblr post that Progressive legally defended the seemingly at-fault driver to disprove his negligence, thus relieving them of the liability to pay the remainder in Kaitlynn’s under-insured motorist protection. Progressive counter argues that they did no such thing, but Matt’s eyewitness account has me believing otherwise. He writes, “At the trial, the guy who killed my sister was defended by Progressive’s legal team. If you are insured by Progressive, and they owe you money, they will defend your killer in court in order to not pay you your policy.”

To the relief of the Fisher family, the motorist was found to be at fault (though they felt this was the case all along). Hereby Progressive is legally required to honor Kaitlynn’s auto policy and pay the remaining difference between her under-insured motorist coverage and Nationwide’s payment. I can assure you that Matt Fisher isnt going to hold his breath until they do.

Circling back to my blog post about the risks businesses face today, Progressive took a huge publicity hit over $80,000, a serious risk to its reputation. Progressive could have easily mitigated this risk through a number of tactics. Rather than dragging out the legal process for more than two years, Progressive could have settled outside of court with the Fisher family. Matt states that Progressive never offered more than one third of the difference between Kaitlynn’s under-insured protection and Nationwide’s remittance to her family. Progressive continued to actively defend the driver, who took Kaitlynn’s life, in court, not good publicity for a company looking to protect its clients. Progressive believed there was credible evidence that Kaitlynn was at fault for the accident, and thus employed their legal team to prove so. Rather than put the Fisher family through the hardship that is both losing their young daughter and enduring the grueling legal process to collect on her policy, they could have taken Nationwide’s lead and paid their portion. For the year ended Decembver 31, 2011, Progressive posted a Net Income of $1.015 billion. That $80,000 payment is immaterial to that amount. I believe that Matt Fisher’s frustrations are more than warranted, and the public outcry arising from his story will be a lesson learned for Progressive.